Correlation Between Geojit Financial and Madhav Copper

Can any of the company-specific risk be diversified away by investing in both Geojit Financial and Madhav Copper at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Geojit Financial and Madhav Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Geojit Financial Services and Madhav Copper Limited, you can compare the effects of market volatilities on Geojit Financial and Madhav Copper and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Geojit Financial with a short position of Madhav Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geojit Financial and Madhav Copper.

Diversification Opportunities for Geojit Financial and Madhav Copper

-0.38

Correlation Coefficient

Geojit Financial  Madhav Copper

Very good diversification

The 3 months correlation between Geojit and Madhav is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Geojit Financial Services and Madhav Copper Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madhav Copper Limited and Geojit Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Geojit Financial Services are associated (or correlated) with Madhav Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madhav Copper Limited has no effect on the direction of Geojit Financial i.e., Geojit Financial and Madhav Copper go up and down completely randomly.

Pair Corralation between Geojit Financial and Madhav Copper

Assuming the 90 days trading horizon Geojit Financial Services is expected to under-perform the Madhav Copper. In addition to that, Geojit Financial is 1.21 times more volatile than Madhav Copper Limited. It trades about -0.02 of its total potential returns per unit of risk. Madhav Copper Limited is currently generating about 0.12 per unit of volatility. If you would invest  3,881  in Madhav Copper Limited on September 2, 2024 and sell it today you would earn a total of  1,137  from holding Madhav Copper Limited or generate 29.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Geojit Financial Services  vs.  Madhav Copper Limited

Geojit Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geojit Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Madhav Copper Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Madhav Copper Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Madhav Copper exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Geojit Financial and Madhav Copper

The main advantage of trading using opposite Geojit Financial and Madhav Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geojit Financial position performs unexpectedly, Madhav Copper can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Madhav Copper will offset losses from the drop in Madhav Copper's long position.

The idea behind Geojit Financial Services and Madhav Copper Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.